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While Veeco Instruments Inc. (NASDAQ:VECO) might not have the largest market cap around , it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$29.07 and falling to the lows of US$23.65. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Veeco Instruments' current trading price of US$24.73 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Veeco Instruments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Veeco Instruments
What's The Opportunity In Veeco Instruments?
Good news, investors! Veeco Instruments is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 19.44x is currently well-below the industry average of 32.47x, meaning that it is trading at a cheaper price relative to its peers. However, given that Veeco Instruments’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Veeco Instruments generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 1.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Veeco Instruments, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since VECO is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on VECO for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy VECO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.